16.6 Examples
highest-valued days were the first three days and
then the value per day dropped off considerably.
This would support rationing backcountry use in
part by limiting the duration of individual trips,
given the particular attributes of the site.
The same study was also designed to determine
how much recreational wilderness users were willing to pay per user day for wilderness canoe trips
under actual crowding conditions that they experienced in the three Ontario wilderness destinations.
The same respondents were split into two samples
for a second set of questions. The first half were
asked their willingness to pay for the same trip under the condition that they saw half as many other
groups per day as they actually experienced. The
other half were asked their willingness to pay for
the same trip if they could expect to see double the
number of other groups as they experienced. The
actual crowding levels included a range of no other
groups per day to about ten groups per day, on average. The willingness to pay estimates were compared over these ranges. Although expectations
over what levels of crowding were expected prior
to the trip were highly correlated with willingness
to pay, it was still apparent that, all else equal,
recreational users were willing to pay for reduced
levels of crowding. So, overall, users were willing
to pay on average about $60 per day for existing
crowding levels, and they were willing to increase
that amount if guaranteed fewer encounters with
other users. At the same time, the existing daily
backcountry user fee was $4.25 per day. The results indicated that user fees could be increased
substantially before many existing users would
choose to no longer visit the areas. This suggests
that one possible strategy to increase value to users
and also generate revenues for the province to use
to maintain these areas, might be to increase user
fees, limit trip duration, and reduce the existing
quota to guarantee fewer encounters with other
users. This strategy is very different from one of
maintaining existing fee levels, but increasing overall user days by reducing quotas.
16.6.2 Example 2: Existence Values for
Creation of New National Parks
in the Northwest Territories
This example illustrates the importance of precisely
defining the good to be valued and of understanding that the marginal value of a good depends on
the context in which the good is offered and the
number already available. The simple policy scenario was to determine the value to Canadians of
creating four new parks to protect tundra ecosys241
tems in the Northwest Territories. Parks Canada
had already spent more than a decade in the planning stages of each of the four proposed parks, and
the agency was very close to making its final recommendations. In situations with previous new
parks, the economic analysis consisted almost exclusively of economic impact analysis of the effect
of park creation on local economies. However,
since these parks would be created for preservation
of habitat and tourism would be minimal, at best,
the value of each of the four new parks, as measured by impact analysis, appeared to be very low.
Indeed, an impact analysis of the impact of the alternative to new park creation, mineral exploration
and mining, would almost assuredly result in
greater economic impacts. Clearly, the methods
that Parks Canada had found adequate for previous
situations did not appear to be suitable for the four
proposed new parks.
The problem was that the policy makers at Parks
Canada who had been relying on impact analysis
were mistaken in their belief that impact analyses
benefits measures were equivalent to measures of
the values of new parks. As described in an earlier
section of this chapter, impact analysis measures
expenditures associated with an activity or the area
associated with the supply curve. These new parks
would actually cost very little to maintain, since no
infrastructure would be developed for tourism and
the lands were already in government ownership.
On the other hand, a true measure of the economic
value of each new park could only be determined
by the area associated with the demand for the park.
Total willingness to pay for the new parks, summed
over all Canadians, would be an appropriate measure of the economic value of the parks. A key feature of the Northwest Territories parks is that they
would not be developed for recreational use, but
rather for protection of habitat. Thus the main category of value for these parks is the existence value
that people hold for the knowledge that these examples of tundra ecosystems would remain intact
for the indefinite future. The one nonmarket valuation method accepted for existence values is contingent valuation. Thus the choice of method was
clear.
The study resulted in the first estimate of an existence value for a Canadian National Park. Parks
Canada initially requested that we concentrate our
efforts specifically on the four proposed parks in
the Northwest Territories. However, as we learned
more about the policy context, it was clear that the
actual environmental good to be valued might not
be as well defined as it appeared to be. The four
parks were part of a larger system of National
Parks. The system as a whole was defined to be
highest-valued days were the first three days and
then the value per day dropped off considerably.
This would support rationing backcountry use in
part by limiting the duration of individual trips,
given the particular attributes of the site.
The same study was also designed to determine
how much recreational wilderness users were willing to pay per user day for wilderness canoe trips
under actual crowding conditions that they experienced in the three Ontario wilderness destinations.
The same respondents were split into two samples
for a second set of questions. The first half were
asked their willingness to pay for the same trip under the condition that they saw half as many other
groups per day as they actually experienced. The
other half were asked their willingness to pay for
the same trip if they could expect to see double the
number of other groups as they experienced. The
actual crowding levels included a range of no other
groups per day to about ten groups per day, on average. The willingness to pay estimates were compared over these ranges. Although expectations
over what levels of crowding were expected prior
to the trip were highly correlated with willingness
to pay, it was still apparent that, all else equal,
recreational users were willing to pay for reduced
levels of crowding. So, overall, users were willing
to pay on average about $60 per day for existing
crowding levels, and they were willing to increase
that amount if guaranteed fewer encounters with
other users. At the same time, the existing daily
backcountry user fee was $4.25 per day. The results indicated that user fees could be increased
substantially before many existing users would
choose to no longer visit the areas. This suggests
that one possible strategy to increase value to users
and also generate revenues for the province to use
to maintain these areas, might be to increase user
fees, limit trip duration, and reduce the existing
quota to guarantee fewer encounters with other
users. This strategy is very different from one of
maintaining existing fee levels, but increasing overall user days by reducing quotas.
16.6.2 Example 2: Existence Values for
Creation of New National Parks
in the Northwest Territories
This example illustrates the importance of precisely
defining the good to be valued and of understanding that the marginal value of a good depends on
the context in which the good is offered and the
number already available. The simple policy scenario was to determine the value to Canadians of
creating four new parks to protect tundra ecosys241
tems in the Northwest Territories. Parks Canada
had already spent more than a decade in the planning stages of each of the four proposed parks, and
the agency was very close to making its final recommendations. In situations with previous new
parks, the economic analysis consisted almost exclusively of economic impact analysis of the effect
of park creation on local economies. However,
since these parks would be created for preservation
of habitat and tourism would be minimal, at best,
the value of each of the four new parks, as measured by impact analysis, appeared to be very low.
Indeed, an impact analysis of the impact of the alternative to new park creation, mineral exploration
and mining, would almost assuredly result in
greater economic impacts. Clearly, the methods
that Parks Canada had found adequate for previous
situations did not appear to be suitable for the four
proposed new parks.
The problem was that the policy makers at Parks
Canada who had been relying on impact analysis
were mistaken in their belief that impact analyses
benefits measures were equivalent to measures of
the values of new parks. As described in an earlier
section of this chapter, impact analysis measures
expenditures associated with an activity or the area
associated with the supply curve. These new parks
would actually cost very little to maintain, since no
infrastructure would be developed for tourism and
the lands were already in government ownership.
On the other hand, a true measure of the economic
value of each new park could only be determined
by the area associated with the demand for the park.
Total willingness to pay for the new parks, summed
over all Canadians, would be an appropriate measure of the economic value of the parks. A key feature of the Northwest Territories parks is that they
would not be developed for recreational use, but
rather for protection of habitat. Thus the main category of value for these parks is the existence value
that people hold for the knowledge that these examples of tundra ecosystems would remain intact
for the indefinite future. The one nonmarket valuation method accepted for existence values is contingent valuation. Thus the choice of method was
clear.
The study resulted in the first estimate of an existence value for a Canadian National Park. Parks
Canada initially requested that we concentrate our
efforts specifically on the four proposed parks in
the Northwest Territories. However, as we learned
more about the policy context, it was clear that the
actual environmental good to be valued might not
be as well defined as it appeared to be. The four
parks were part of a larger system of National
Parks. The system as a whole was defined to be